❗️🇨🇳Cable FX Macro Weekly Note: China August IP, Retail Sales

**As seen in Risk In The Week report 09/08/23, subscribe at cablefxm.co.uk/reports

China July economic figures came to disappoint forecasts, retail sales increased by 2.5%Y/y vs est. 4.0%, industrial production rose 3.7% Y/y vs est. 4.3%. In broad terms, the industrial sector never delivered on the expectations for the Chinese economy reopening in 2023. Both mining and manufacturing sectors slowed in July to 1.3% and 3.9% annual rates, respectively. Within industries, the largest drops were seen in pharmaceuticals, equipment, non-metal minerals, and beverages. In the retail space, office and construction material sales see contractions this year, restaurant and jewelry have expanded the most as of July. Despite the slowdown and the recent property crisis, the chance of a recession over the next twelve months stands at 13%, according to data compiled by Bloomberg. Economists’ survey median sees China output expanding by 1.0% in 3Q and 1.2% in 4Q, the former was revised lower. The consensus now sees the Chinese economy growing by 5.1% in 2023, the projections range from 4.5% to 5.8%. Analysts at J.P. Morgan are expecting industrial production to rise by 3.4% Y/y in August, they made a reference to a pick up in output in both the NBS and Caixin PMIs, and they added that this is likely reflecting the impact of policy support in the sector. For retail sales, J.P. Morgan sees a rise of 3.1% Y/y.